The Risks of Being Underinsured

– Advice from Your Montgomery, Alabama Insurance Agent

Bruce Jenner’s February 2015 accident highlighted the issue of underinsured motorists in the United States. Even with millions of dollars, Jenner had only carried $250,000 of insurance coverage when he caused a fatal accident. This dangerously low insurance coverage is not uncommon, and if you are only using $250,000 of insurance, then you could be putting yourself at risk for excess financial liability.

The Dangers of Being Underinsured

You are required to carry auto insurance and you follow that, but if you are only carrying the state’s mandated minimums, you are most likely underinsured. The state sets these minimums to offset costs associated with accidents, but these minimums are by no means adequate coverage. Liability coverage is most often what is not adequately funded. This coverage may protect you if someone is injured in an accident that you caused. It could also cover costs of property damage and bodily harm if your policy is suitably designed to do so.

Mistakes to Avoid When Insuring Your Vehicle – A Montgomery, Alabama Insurance Agent Can Help

Many consumers are underinsured because they purchase their coverage haphazardly. Some common mistakes made during the purchasing phase include:

  • Buying based on price alone. While price is important for all consumers, it should not be the main deciding factor. When you purchase insurance coverage solely based on the price tag, you may be purchasing extremely low coverage, leaving you vulnerable.
  • Leaving out important coverage options. There are plenty of different types of auto insurance coverage aside from liability. In order to save, some companies will leave out these critical policies to offer consumers the bare minimum, and then entice them with a lower price. If your policy does not have coverage like collision, comprehensive, medical payments or personal injury protection, you may be underinsured.
  • Not insuring yourself for underinsured/uninsured motorist coverage. What if you are involved in an accident with someone who does not have insurance or is grossly underinsured? By having underinsured/uninsured motorist coverage, you can offset the costs that the other driver has no means to pay for.
  • Not having your insurance policy periodically reviewed. Even if the policy you purchased was adequate at the time, circumstances change over the years. You need your auto insurance policy reassessed at least once a year to make sure you still have the right coverage amount.

Make sure you are protected. Contact The Nowell Agency to examine your current auto insurance policy and make sure you are not driving with costly gaps in your coverage.

Looking for a Montgomery, Alabama insurance agent to help advise you? Give us a call at 877-813-9568.